Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your organization’s health. While it may be heresy to say this, recent evidence from Japan and elsewhere suggests that it’s time to question these methods.
Admittedly, continuous improvement once powered Japan’s economy. Japanese manufacturers in the 1950s had a reputation for poor quality, but through a culture of analytical and systematic change Japan was able to go from worst to first. Starting in the 1970s, the country’s ability to create low-cost, quality products helped them dominate key industries, such as automobiles, telecommunications, and consumer electronics. To compete with this miraculous turnaround, Western companies, starting with Motorola, began to adopt Japanese methods. Now, almost every large Western company, and many smaller ones, advocate for continuous improvement.
But what’s happened in Japan? In the past year Japan’s major electronics firms have lost an aggregated $21 billion and have been routinely displaced by competitors from China, South Korea, and elsewhere. As Fujio Ando, senior managing director at Chibagin Asset Management suggests, “Japan’s consumer electronics industry is facing defeat. “Similarly, Japan’s automobile industry has been plagued by a series of embarrassing quality problems and recalls, and has lost market share to companies from South Korea and even (gasp!) the United States.